Facebook is working with HTC to build an Android-based smartphone with Facebook social networking services at its core, according to a report.
The phone, code-named "Buffy," would run a version of Android that's altered heavily by Facebook, according to a report in All Things D that cited unnamed sources. The new phone won't be available for a year, the report added.
HTC and Facebook haven't commented on the report.
Several analysts and bloggers immediately called the Facebook phone a bad idea that would suffer in a crowded smartphone market that includes Apple's iPhone and dozens of Android-based devices made by several manufacturers, including HTC.
Many smartphones available today already support social networking apps, and some models have a dedicated Facebook button, they noted.
"I don't see how a single handset, even with the Facebook ecosystem shoe-horned into a mobile device, could have an impact in the marketplace," wrote Forbes contributor Ewan Spence.
However, Ramon Llamas, an analyst at IDC, gives Buffy a chance to succeed.
"I think Facebook can make a go of this, [partly] since mobile devices are inherently social," Llamas said in an email interview. "This is about deeply embedding Facebook into a phone and not just making it an app."
Llamas said applications already available through Facebook, such as Words for Friends and Farmville, would likely be valuable on a Facebook phone. "If you think of Facebook as its own ecosystem allowing communications and applications, you're already on your way to having an experience similar to what most smartphones and smartphones users already do today," Llamas added.
He also noted that HTC makes quality large touchscreen devices, a key ingredient to making a Facebook phone work.
Rob Enderle, an analyst at Enderle Group, joined the naysayers, noting that Microsoft's Windows Phone platform hasn't sold well even with its social networking tools, which evolved partly through a partnership with Facebook.
The Facebook phone could pit HTC against Google and Android, partly because of Google's interest in its own Google+ social network, Endlerle said. And the planned smartphone could pit HTC against Microsoft because the new device would rely on Android.
Too much conflict between parties
"Microsoft might even have said no to this phone - maybe Facebook feels Microsoft is not a good partner," Enderle said.
"It's a project that looks like it can't be successful because it creates too much conflict between the various parties, and the opportunity costs are mammoth," Enderle said. "It looks like Facebook is trying to piss off the most people in the shortest time possible."
Enderle said that a Facebook phone should have easy interaction with many social networks, not just its own. "A phone that just did Facebook wouldn't be all that useful. Everybody today has several social networks," he said.
All Things D reported that Facebook CTO Bret Taylor is leading the Facebook phone project.
Facebook has 350 million active mobile users, and relationships with nearly 500 global mobile operators, which would apparently give it a strong foothold with a new Facebook phone.
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